Partners salary and deduction
This query is : Resolved
02 August 2017
Hello
Section 44AD clearly disallowed deduction of partners salary and interest from presumptive profit. But what if firm maintains proper books of accounts and get it audited u/s 44AB. e.g. firms book profit is 15% of turnover. Firm maintained proper books of accounts and claim deduction of salary interest as per section 40b and Net profit comes around 5% of turnover.
can firm pay tax on 5% of turnover after claiming deduction of interest & salary by proper maintaining books and get it audited u/s 44ab?
kindly clarify
Section 44AD clearly disallowed deduction of partners salary and interest from presumptive profit. But what if firm maintains proper books of accounts and get it audited u/s 44AB. e.g. firms book profit is 15% of turnover. Firm maintained proper books of accounts and claim deduction of salary interest as per section 40b and Net profit comes around 5% of turnover.
can firm pay tax on 5% of turnover after claiming deduction of interest & salary by proper maintaining books and get it audited u/s 44ab?
kindly clarify
02 August 2017
if the firm does NOT opt for 44AD, it can very well deduct the allowable salary. No issues.
Tax audit is required only if it crosses the thresh hold limit of turnover
Tax audit is required only if it crosses the thresh hold limit of turnover
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